Early Look

Wednesday, October 13, 2021

Futures	Up/Down	%	Last
Dow	34.00	0.10%	34,295
S&P 500	5.75	0.14%	4,346
Nasdaq	61.75	0.42%	14,715

 

 

U.S. futures recover from overnight losses ahead of Dow component JPMorgan earnings and inflation data later this morning (CPI), reversing overnight losses despite weakness in Dow component Apple (AAPL), which is down about -0.5% after reports it expects to make 10 million fewer iPhone than planned and is poised to slash iPhone production goal due to chip crunch. Oil prices and Treasury yields decline, while gold rises ahead of a key reading of consumer price September inflation. Futures are getting a boost after better economic data in China as September exports rose 28.1% from last year as consumer demand outpace supply chain disruptions and power shortages, while last night’s passage of a debt ceiling extension by House lawmakers puts at least one market concern to the side until early December. In Asian markets, The Nikkei Index fell -90 points to 28,140, the Shanghai Index rose 14 points to 3,561 and the Hang Seng Index was closed. In Europe, the German DAX is up over 100 points to 15,250, while the FTSE 100 is slightly lower at 7,120. U.S. stocks ended lower following a choppy session on Tuesday, with investors nervous about upcoming third-quarter earnings reports. In addition to the CPI data, the Federal Reserve will release minutes from its last policy meeting, and investors are looking for further clues on when the central bank could begin tapering its bond-buying program.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -10.54 points, or 0.24%, to 4,350.65

·     The Dow Jones Industrial Average fell -117.72 points, or 0.34%, to 34,378.34

·     The Nasdaq Composite slipped -20.28 points, or 0.14%, to 14,465.92

·     The Russell 2000 Index advanced 13.63 points, or 0.61% to 2,234.27

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     8:30 AM ET         Consumer Price Index (CPI) Headline MoM for September…est. +0.3%

·     8:30 AM ET         CPI Core: Ex Food & Energy MoM for September…est. +0.2%

·     8:30 AM ET         Consumer Price Index (CPI) Headline YoY for September…est. +5.3%

·     8:30 AM ET         CPI Core: Ex Food & Energy YoY for September…est.+4.0%

·     10:30 AM ET      Weekly DOE Inventory Data

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AYR, BLK, DAL, JPM, SOTK

·     Earnings After the Close: ETWO, ODC

 

Other Key Events:

·     China CPI, PPO for September

 

 

Macro	Up/Down	Last
Nymex	-0.56	80.08
Brent	-0.60	82.82
Gold	11.60	1,772.80
EUR/USD	0.0034	1.1562
JPY/USD	-0.04	113.56
10-Year Note	-0.015	1.565%

 

 

World News

·     China September exports rose 28.1% from last year as consumer demand outpace supply chain disruptions and power shortages

·     Japanese Core Machine Orders (M/M) Aug: -2.4% (exp 1.4%; previous 0.9%); Core Machine Orders (Y/Y) Aug: 17.0% (exp 13.9%; previous 11.1%)

·     The House on Tuesday voted along party lines to raise the U.S. borrowing limit into December, as Democratic lawmakers wrestled with how to set a new ceiling for U.S. debt later this year over Republican resistance.

 

Sector News Breakdown

Consumer

·     Duckhorn Portfolio Inc (NAPA) said selling stockholders are offering 12 mln shares of common stock

·     Monster Beverage (MNST) downgraded to Hold from Buy at Jefferies

 

Energy, Industrials and Materials

·     International Paper (IP) announces up to $2B share repurchase program

·     Boeing (BA) is the latest federal contractor to mandate COVID-19 vaccinations for all employees by December 8 under the Biden administration’s new rules saying its 125K U.S. employees must show proof of vaccination or have an approved religious or medical exemption by the deadline.

·     Yesterday, Chicago soybean futures fell to the lowest level in nearly a year following a U.S. Department of Agriculture report that showed larger than expected yields of soybeans and corn; the USDA showed an uptick of nearly 100M bushels to U.S. corn ending stocks

·     Glencore Plc (GLNCY) said that it had reached an agreement to sell its zinc business in Bolivia to Canada’s Santa Cruz Silver Mining for some $110M

·     Rattler Midstream LP (RTLR), a subsidiary of Diamondback Energy, Inc. (FANG) announces strategic midland basin gas gathering & processing joint venture; invested approximately $104 mln in cash to acquire a minority interest in joint venture

·     Vistra (VST) announces $2 billion share repurchase program

·     Gran Tierra Energy Inc. (GTE) said that Q3 production grew 53% and that it expects the gains to continue in Q4; said it has produced an average of 28,957 barrels of oil a day in the quarter, compared with 18,944 barrels a day in the prior year period and 23,035 barrels a day QoQ

·     Greenbrier (GBX) announced the acquisition of more than 3,600 railcars, a portion of which will be held in GBX Leasing

 

Financials

·     BlackRock (BLK) Q3 adj EPS $10.95 vs. est. $9.35; Q3 revs $5.05B vs. est. $4.9B; qtrly long-term net inflows of $98 billion; assets under management at qtr-end were $9.46 trillion vs $7.81 trillion at end of Q3

·     AvidXchange (AVDX) 2.64M share IPO price $25.00

·     AllianceBernstein L.P. (AB) preliminary assets under management decreased to $742 billion during September 2021 from $761B at the end of August. Firmwide net inflows were outweighed by market depreciation, resulting in a 2% decline in AUM. In the month of September, net inflows to Retail and Private Wealth were partially offset by net outflows from Institutions.

·     Ellington Financial Inc (EFC) commenced an underwritten public offering of 5 mln shares of common stock

·     RenaissanceRe Holdings Ltd. (RNR) estimates that losses from certain 2021 catastrophe events will have a net negative impact of approximately $725 million on the Company’s Q3 results of operations

·     Manning & Napier (MN) preliminary assets under management (AUM) of $22B for September, compared with $22.7B as of Aug.31.

 

Healthcare

·     Sarepta (SRPT) announces $500M common stock offering and guiding Q3 revs about $166.9M vs. est. $172M; had approximately $1.6 bln in cash, cash equivalents and investments as of September 30, 2021

·     CRISPR Therapeutics (CRSP) shares slipped after announcing updated results from the company’s early-stage trial of its CAR-T cell therapy CTX110 as two patients in the phase 1 trial experienced Grade 3 or higher infections, with one patient having HHV-6 encephalitis, and another developing pseudomonal sepsis that resolved in four days.

·     CytoSorbents (CTSO) receives full FDA investigational device exemption approval to begin U.S. star-d trial on apixaban and rivaroxaban removal by the DrugSorb-ATR™ antithrombotic removal system during urgent cardiothoracic surgery

·     Homology Medicines (FIXX) announced the pheEDIT Phase 1 clinical trial for HMI-103, a one-time, in vivo product candidate that utilizes a gene editing approach for phenylketonuria, or PKU, based on the investigational new drug application, or IND, clearance from the FDA

·     Apollo EndoSurgery (APEN) 8.4M share Spot Secondary priced at $7.75

·     Bicycle Therapeutics (BCYC) 3.24M share Secondary priced at $54.00

·     Relay Therapeutics (RLAY) 13.21M share Secondary priced at $26.50

·     Biogen (BIIB) announces results of a new analysis of immune response to the COVID-19 vaccine among people with multiple sclerosis (MS).

·     Teva Pharmaceuticals Europe BV, a European affiliate of Teva (TEVA) presents new analyses of the COBRA study, which concluded no evidence was found to suggest that infants were adversely affected by maternal exposure to glatiramer acetate (GA) during pregnancy and breastfeeding with use of COPAXONE

 

Technology, Media & Telecom

·     Apple (AAPL) suppliers Broadcom (AVGO), Texas Instruments (TXN) struggling to deliver enough chips; Apple expects to make 10 million fewer iPhone than planned and is poised to slash iPhone production goal due to chip crunch – Bloomberg (watch shares of AAPL suppliers including CRUS, QRVO, STM, AVGO, SWKS)

·     SAP AG (SAP) raised its 2021 projections for non-IFRS cloud revenue at constant currencies to range from EUR9.4B to EUR9.6B, up from its earlier view of EUR9.3 billion and EUR9.5 billion; also boosts cloud and software revenue at constant currencies view to EUR23.8 billion to EUR24.2 billion from its earlier view of EUR23.6 billion to EUR24 billion.

·     Qualcomm (QCOM) announces new $10.0 billion stock repurchase authorization

·     IAC Inc. (IAC) reports September Angi Inc. total revenue up 18% from last year with Dotdash revenue up 25%, and its Search business revenue up 74% from last year and Emerging & Other revenue was up 33% from last year

·     Vimeo Inc (VMEO) total revenue for September 2021 up 33%; subscribers for September 2021 up 14%; ARPU for September 2021 up 16%

·     Smart Global Holding (SGH) Q4 adj EPS $2.16 vs. est. $1.60; Q4 revs $467.7M vs. est. $461.3M; sees Q1 adj EPS $1.80-$2.20 vs. est. $1.49; sees Q1 revenue $440M-$480M vs. est. $458.55M; GAAP gross margin of 25.2%, up 620 basis points versus the year ago quarter and non-GAAP gross margin of 26.4%, up 690 basis points versus the year ago quarter

·     VOXX International (VOXX) 2Q EPS $0.01 vs est. $0.07 on sales $143.1Mm vs est. $134.4Mm